France Telecom H1 net profit falls 4.3% - Mobile World Live

France Telecom H1 net profit falls 4.3%

21 OCT 2009

France Telecom – Europe’s third-largest telecoms group (after Vodafone and Telefonica) and owner of the Orange mobile brand – today reported a 0.5 percent fall in revenue for the first half of 2009 and also saw its core operating profit margin and net profit slip. H1 sales came in at EUR25.5 billion (US$35.9 billion), whilst net profit for the first six months (ended 30 June) fell 4.3 percent to EUR2.56 billion. The group posted EBITDA of EUR8.821 billion for the first half, up on an average expectation of EUR8.641 billion in a Reuters poll of 12 analysts. Core operating profit margin at the French former state-owned incumbent operator slipped 0.7 percentage points in the first half. Total subscribers reached 186 million at end-June (a 6.6 percent increase year-on-year), driven by a 9.7 percent rise in mobile services. Orange now claims 125.5 million customers.

France Telecom warned of a slowdown in activity in the second half of this year and increasing cost pressure due to regulatory decisions. “For the second half, with the economic environment remaining difficult, the group will continue with targeted marketing programs and cost-reduction efforts,” said chief executive Didier Lombard in a statement. “We are confident we can adjust to current conditions while preparing to take maximum advantage of the recovery when it occurs.” Lombard added that the operator expects the impact of regulatory measures in the second half to be twice that of the first half (impact estimated at EUR383 million in the first half), taking into account various reductions in mobile call termination rates. France Telecom forecast EBITDA and revenue to be slightly lower in the second half compared to the first. However, “excluding regulatory impacts, revenue should still outperform GDP growth trends,” CFO Gervais Pellissier said in a conference call.

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